Here's the detailed comparison clearly structured in pointers FinOps Vs Cost Recommendations:
Aspect 1: Scope and Approach
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FinOps: Holistic and ongoing practice involving finance, business, and technology teams to manage and optimize cloud financial operations continuously.
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Cost Optimization: Tactical or operational activity aimed specifically at reducing cloud expenses or eliminating unused/wasted resources.
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Example:
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FinOps: Setting up monthly cloud financial review meetings with cross-functional teams.
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Cost Optimization: Rightsizing oversized Azure VMs based on performance metrics.
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Aspect 2: Goal
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FinOps: Focused on long-term financial accountability, creating a culture of responsible cloud consumption across teams.
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Cost Optimization: Focused on immediate cost savings and reducing unnecessary cloud expenses.
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Example:
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FinOps: Building a chargeback/showback model where each application team sees and owns their cloud costs.
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Cost Optimization: Deleting unattached managed disks or unused storage accounts.
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Aspect 3: Time Horizon
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FinOps: A continuous, strategic process with regular reviews, forecasting, and improvements aimed at sustained efficiency.
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Cost Optimization: Short-term, project-based interventions to reduce immediate overspending.
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Example:
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FinOps: Forecasting Azure spend for the next financial year and adjusting team budgets accordingly.
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Cost Optimization: Moving workloads to Spot VMs to reduce costs quickly for non-critical environments.
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Aspect 4: Team Involvement
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FinOps: Involves multiple teams, including Finance, Cloud Operations, Engineering, and Business Leadership.
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Cost Optimization: Usually driven by Cloud/Infrastructure Operations teams focused on resource cleanup and rightsizing.
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Example:
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FinOps: Finance and IT collaboratively deciding on Reserved Instances purchases based on projected workloads.
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Cost Optimization: Cloud Ops team identifies and terminates idle VMs monthly.
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Aspect 5: Metric Focus
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FinOps: Focuses on unit economics, efficiency ratios (e.g., cost per transaction), forecast accuracy, and budget adherence.
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Cost Optimization: Focuses on monthly cost reduction metrics, like reducing wastage, improving resource utilization.
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Example:
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FinOps: Tracking cost per user on a SaaS application and optimizing based on business growth.
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Cost Optimization: Reducing VM SKU sizes where the CPU utilization is consistently under 30%.
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Aspect #1: Scope and Approach
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FinOps: Holistic practice involving finance, business, and technology teams
Example: Monthly cross-team financial reviews -
Cost Optimization: Tactical reduction of Azure costs
Example: Rightsizing Azure VMs
Aspect #2: Goal
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FinOps: Achieve long-term financial accountability and efficiency
Example: Developing cost-aware culture among developers -
Cost Optimization: Immediate reduction in cloud expenses
Example: Removing unused Azure storage accounts
Aspect #3: Time Horizon
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FinOps: Long-term, strategic, continuous
Example: Yearly Azure cost forecasting -
Cost Optimization: Short-to-medium term actions
Example: Switching Azure VMs to Spot instances
Aspect #4: Team Involvement
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FinOps: Cross-departmental (Finance, IT, Management)
Example: Finance collaborates with app teams for budget setting -
Cost Optimization: Typically managed by Cloud/IT operations
Example: IT operations managing Azure resource cleanup
Aspect #5: Metric Focus
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FinOps: Unit economics, forecasting accuracy
Example: Tracking Azure cost per active user -
Cost Optimization: Immediate spend reduction, utilization
Example: Monitoring and resizing idle Azure VMs
Aspect #6: Tools Used
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FinOps: Cloudability, CloudHealth, Azure Cost Management
Example: Using Cloudability for multi-cloud visibility -
Cost Optimization: Azure Advisor, Azure Cost Management
Example: Using Azure Advisor to identify cost savings
Aspect #7: Governance
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FinOps: Formal governance structure
Example: Establishing a Cloud Financial Operations Committee -
Cost Optimization: Operational-level governance
Example: Weekly cleanup of orphaned resources
Aspect #8: Budget Management
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FinOps: Strategic budgeting with periodic reviews
Example: Quarterly Azure budget reviews -
Cost Optimization: Focused on immediate cost actions
Example: Monitoring spend limits in Azure subscriptions
Aspect #9: Visibility & Reporting
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FinOps: Centralized visibility across departments
Example: Monthly financial dashboards for executives -
Cost Optimization: Detailed operational reports
Example: Weekly Azure cost analysis reports
Aspect #10: Culture Impact
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FinOps: Encourages organizational cultural shift towards accountability
Example: Training teams in financial literacy -
Cost Optimization: Minimal cultural impact, focused on immediate action
Example: Resource cleanup guidelines communicated
Aspect #11: Automation
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FinOps: Strategic automation for financial tasks
Example: Automated chargebacks and showbacks -
Cost Optimization: Tactical automation for immediate tasks
Example: Azure automation scripts for VM shutdown
Aspect #12: Decision Making
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FinOps: Data-driven strategic decision making
Example: Cost-benefit analysis for cloud investments -
Cost Optimization: Reactive, operational decisions
Example: Decision to shut down unused VMs immediately
Aspect #13: Stakeholder Communication
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FinOps: Regular communication with stakeholders
Example: Monthly cost review meetings with executive teams -
Cost Optimization: Focused internal communication
Example: Weekly cost optimization emails to IT teams
Aspect #14: Resource Ownership
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FinOps: Clear ownership assigned to teams/business units
Example: Assigning app owners responsibility for cloud spend -
Cost Optimization: Resource-level ownership
Example: Operations team handling VM rightsizing
Aspect #15: Continuous Improvement
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FinOps: Ongoing iterative improvements
Example: Annual review of FinOps processes and frameworks -
Cost Optimization: Periodic operational review
Example: Monthly check for unused Azure resources
